China: Swine breeding stock development

Genus' porcine genetics subsidiary, PIC China, has
signed an agreement to add more nucleus herd (great-grandparent) capacity to its
nationwide network of breeding stock production.

The Company has contracted to lease a new 600 sow farm that will be built
to PIC's specification by Benxi Mu Gongshang Co. Ltd, a firm formed by the Benxi
Animal Husbandry Bureau and private investors in the north-eastern province of
Liaoning.

Construction begunConstruction has
already begun on a biosecure site under the supervision of PIC's project
management team and will be stocked by import early in 2009. The herd will
function primarily as a sire line nucleus, producing a range of high-performance
boars to maximise the rate for multiplication of elite genetics to be used by
China's foremost pork producers.

Two similar projects were commissioned
in 2008: a nucleus farm in Jiangxi province by importing pigs from PIC's
nucleus farm in Canada and the acquisition of a nucleus farm in Sichuan.
Currently, negotiations are at an advanced stage to build a further nucleus
facility dedicated to the development of an integrated pork chain. It will
produce one million market pigs a year.

Established
source
PIC China's production base is the best established source of
prime porcine genetics in China and, with the Benxi herd, includes five nucleus
farms comprising 4,500 sows. Together with a network of contract multiplication
farms, PIC controls 10,000 breeding sows producing breeding stock for customers
and partners countrywide.

In addition, PIC's larger customers have their
own multiplication farms using PIC grandparents. These supply parent gilts for
their commercial farms.